What's behind the figures?;

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What's Behind the Figures?
By ALEXANDER BITKER Principal, San Francisco Office
Presented before the North Coast Chapter of The California Society of Certified Public Accountants, Petaluma, California — February 1959
DURING the past few years a great deal of attention has been di­rected
by the accounting profession, and particularly by the American Institute of Certified Public Accountants and our own Cal­ifornia
Society of Certified Public Accountants, to promote better understanding between independent public accountants and bankers as well as other credit grantors.
In reaching a decision whether to extend credit, a banker con­siders
many factors. Among the more important of these are the financial position of the borrower and the results of its operations as shown by its financial statements. To a great extent, bankers have come to rely upon us, the independent accountants, for an opinion as to whether the financial statements present fairly this information.
The banker desires the unqualified opinion of the independent accountant, expressed in language similar to that contained in the standard short form of report developed by the American Institute of Certified Public Accountants. The language of the standard short form has been developed to express precisely and concisely the in­dependent
accountant's representations as to the examination per­formed
and his conclusions as to the financial statements. While these representations could be stated at greater length, added words would not alter the essential character of what is stated, and the general acceptance of this short form unqualified opinion gives it added weight as a symbol of fair presentation in conformity with generally accepted accounting principles.
Perhaps one point should be stressed above all others. The accountant's opinion, whether unqualified or qualified, is not formed merely by checking figures in the books or other records. Many questions arise during an examination that require the exercise of mature, experienced judgment. Obviously the value of a CPA's opin­ion
rests on the quality of his judgment and his independence. In expressing an opinion, the accountant assumes a heavy responsibility for the professional competence of his work.
One question which a credit grantor asks when he ponders the question, "What's behind the figures?" is really, "Who is behind the
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